Global Economics

Is the U.S. Still Relevant?


Indian executive and author Aseem Prakash, seeing economic power shifting eastward, says many in business don't need the American Dream these days

For a long time, when Americans went to sleep at night, the world waited impatiently for them to get up the next morning. The main pillars of economic progress—capital, technology, skills, and innovation—were mostly in the U.S. Everybody wanted a piece of it. Whatever mantra Corporate America was using for success became the automatic blueprint for doing business everywhere. Whether people could come to the U.S. or not, everybody wanted to live the American Dream. The American Way became the de facto business culture of markets around the world.

Fast-forward to the present. The world is no longer waiting for Americans to wake up. In fact, given how quickly the world of business is changing, people around the planet have started asking whether the U.S. is still relevant. Nowadays, if you are looking for the next Detroit, it is located in Shanghai. If you are looking for the next Wall Street, it is rapidly developing in Hong Kong or Mumbai. If you are looking for the next green technology innovation, it may be coming from Japan or Abu Dhabi. If you are looking for a new engine of growth for your IT products and services, the new front office of the world is in India.

A few years ago, you had to come to the West, especially to America, to make it in the world. Today, from autos to aviation, financial services to food consumption, power is rapidly shifting from the West to the East. You don't need the American Dream. People are chasing their own dreams back in their home countries.

For sure, the Chinese and Indians have been humbled by the recent global recession. But, as President Barack Obama keeps reminding them, they can no longer depend on the U.S. consumer for their economic success. The structure and boundaries of the new global marketplace are getting redefined and the U.S. consumer, instead of being the driver, is ending up being just another passenger on the bus.

The foundations of this new marketplace have already been put into the ground. When Porsche introduced its first-ever sedan, it used the Shanghai auto show to launch the model. India's Tata Motors (TTM) produced the world's cheapest four-door sedan—for Indians. China's BYD has developed an affordable plug-in electric car. It is on sale in China. The U.S. will have to wait for a few years.

No Longer Business as Usual

Earlier, such innovations were developed for markets in the West, but in a bizarre twist of fate, the U.S. that until recently exported its business models to the world, may find itself learning from the low-cost giants or importing their models.

Americans are angry at the shenanigans of Wall Street and at countries that are taking away their jobs. The government, asleep at the wheel earlier, is now in overdrive mode. "No more tax breaks for companies shipping jobs overseas," President Obama said in a recent speech. "Fire H-1B visa holders first," wrote a U.S. senator in a letter to Microsoft (MSFT). Buying American-made iron, steel, and other manufactured products is one of the conditions of the $787 billion stimulus plan.

As city after city struggles to survive, anecdotal evidence suggests that the Buy American clause is finding its way in companies and sectors that have nothing to do with the stimulus plan. The largest open market of the world is sending a message: America is no longer open for business—not the same way it was open before, anyway.

Once, the world looked up to Corporate America for ideas and inspiration. A generation of managers grew up believing in the GE (GE) Way. American brands are so well known that sometimes people know more about U.S. corporations than companies from their own countries. Management textbooks everywhere are full of shining examples of U.S. companies.

Now the world shudders to think if there is more or what else may be in store. America has not just lost confidence. It has lost its voice, too. Indeed, the portrait of the land of liberty is not pretty. The glory days of the past may be over. The U.S. may not be able to dominate the world in the same old ways.

So, is this the beginning of the end of America? The U.S. may be down, but it's not dead. America is important not just because of the size of its economy (larger than the combined economies of Japan, Germany, China, and India). What makes the U.S. unique is its people: creative, competitive, and commited to success. When—as it surely will—America recovers and redesigns its future, the question the world should be asking is "Will we remain relevant to the U.S.?"

Aseem Prakash is the author of a forthcoming book, Midnight Economy: The New Business Order Emerging from the Shadows, and ex-CEO of I Media Corp. Ltd., a digital media firm in India. He has nearly 25 years of global experience. He has worked and lived in India, New Zealand, Hong Kong, Australia, the U.S. and Canada. He currently lives in Canada.

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